Simplify Government Regulations for the Small Business Majority, Not Just Special Interests

The U.S. Small Business Administration’s Office of Advocacy is once again doing something that has a laudable purpose.

We’ll see if this time around it results in broader applicability to small businesses — and not just limited to a small handful of special interests.

The program is called the R3 program (the “Small Business Regulatory Review and Reform Initiative“).

In this program, the general public is being invited to nominate a Federal government regulation or rule for reform.  The idea is, if something is burdensome to small businesses, it should be brought up for reform.

Anyone can nominate a regulation or rule for reform, until December 31, 2008.  This is a redux of the program which started last year and resulted in 10 rules/regulations being recommended for reform.

Dawn Rivers Baker wrote about this program a few weeks ago: 

The Regulatory Review and Reform Initiative (that is, r3) has its roots in Section 610 of the Regulatory Flexibility Act. Under that part of the law, regulatory agencies are required to occasionally blow the dust off the regulations on their books and take a look at them, to see whether they might be outdated, ineffective, duplicative or otherwise unnecessary.

That sounds a lot simpler than it is. There are hundreds of thousands of regulations on the books; just deciding where to start must be fairly overwhelming. Sullivan’s idea was to harness the experiences of small business owners who need to deal with those regulations by asking them to nominate federal regulations they believe are in need of reform.

Advocacy launched the r3 initiative in early 2007 and, by the end of the year, had received almost 90 nominations from small business owners. * * *

From those nominations, a “Top 10″ were selected and submitted to the relevant agencies as candidates for review and reform. Among those original ten regulations, seven have received some form of agency review and/or reform proposal and one was the subject of a legislative proposal to get the job done.

Sounds like a great program, right? Government responding to the needs of small business owners, and all that.

Fundamentally it’s a good program. It’s just that it would have been a much better implementation had the 10 nominated rules actually impacted large numbers of small businesses. Instead, out of the 10 rules nominated for reform this past year, only one has broad applicability to millions of small businesses. That’s the home office tax deduction, which desperately needs modifying.

Everything else on the list is limited to certain industries and interests. In some cases it’s a BIG stretch to even find a small business connection — like the rules about water treatment plants and updating FAA flights rules for the Washington, D.C. metro area.

I suggest that this upcoming year, SBA’s Advocacy select rules and regulations that matter to large numbers of small businesses, such as the Alternative Minimum Tax and health insurance deductibility rules.  For more, try this small business wish list from the NFIB.